|FOR IMMEDIATE RELEASE:||CONTACT: CHRISTI HARLAN|
|Thursday, February 25, 1999||202-224-0894|
STATEMENT OF CHAIRMAN GRAMM
ON FINANCIAL SERVICES MODERNIZATION
Legislative Hearing, February 25, 1999
Let me basically outline where we are. When it became clear after the last election that I would become chairman of this committee, I did something that is often dangerous for a legislator and that is, I went back and read H.R. 10.
H.R. 10 is 318 pages long. You can knock down the barriers that separate the insurance, banking and securities industries in about 65 pages. What I found in H.R. 10 was basically a mass of compromises where often the first half of the sentence would say one thing, and the second half of the sentence would say another thing. One provision in one section would reach one conclusion, and another provision in another section would reach another conclusion.
So I concluded that trying to go back to H.R. 10 was a waste of time because, in the end, to the extent that I have any influence over this process — and I’m only one member of this committee, but I am the chairman— I am not going to willingly pass a bill where not only do I not know what it means but nobody else knows what it means.
If we’re going to really modernize the financial markets in America, it’s important that Congress take a position and say what it wants to do.
Political compromises are wonderful things. I have made my living as a politician for 20 years by making compromises. I understand political compromises, and they’re very important. They’re critically important to the functioning of our society.
But it seems to me that a compromise ought to be a compromise on position where we know exactly what we’re doing. I don’t want to be part of an effort where two different groups read the bill and see two different things, and someday it will be decided what we’ve really done. In the end, we ought to decide what we want to do.
I would like to say to those who have met with me and talked about this bill that I have enjoyed having the opportunity to work with you. There are obviously a lot of very talented people out there, and they’ve been hired for good reason. They really understand these issues, and I have learned a lot from listening.
I do believe we have improved the initial draft. The initial draft was really what you would do if you set out to knock down these three barriers, and you didn’t worry about trying to come up with all the political tying of loose ends. It was a logical starting point for me.
We have, I believe, narrowed the bill in terms of moving toward putting a committee mark out on Friday. There are still areas where decisions have to be made, where we have to decide some of these fundamental issues. But I want to thank people for working with me from outside groups in trying to do that.
This is a difficult bill. The problem is that while there is an increasing consensus that powerful market forces are knocking down these barriers that separate banking and securities and insurance, and they’re doing it in a haphazard fashion based on innovative regulators. There is a growing consensus that the economy and the country would benefit if we could knock down these barriers systematically and set up a rational system.
The problem is, of course, that various elements of the three sectors would like to knock them down in name only. We all want to try to keep what we had under the old system at the same time that we implement the new system. There’s certainly nothing wrong with advocating your interest; if you don’t, nobody else will.
In any case, I want to thank people who have worked with me on the bill. We still have many things to work out. Certainly, there are many other people who need to be heard from on this committee. But I do believe we are moving toward a consensus — I hope we are — and I want you to know that those few issues that do remain are important.
I hope that we can build a consensus and pass this bill. I was in the unfortunate position last year of choosing to oppose the bill. If there was anyone in my state who was deeply concerned about that, I never really heard from them. But I think it is an important national issue. If we can write a good bill this year, I want to do it. I believe we can, and I don’t want to participate in writing a bad one.
I want to thank all of you for your input. It’s been very, very valuable.
For more information on the legislation pending before the Banking Committee, please visit the committee’s website at http://banking.senate.gov.